Valid & Invalid transactions

Q: Please advise regarding online affiliate marketing programs:

Affiliate marketing is a type of marketing in which a business (the merchant) rewards an “affiliate” (marketer/advertiser) for each customer he brings to the business by his own marketing efforts. For example, Company Z (the merchant) sells only kitchen appliances online. They run an affiliate-marketing program where Umar (the affiliate) can advertise the merchant’s website on his own website, or other places on the internet – all for a monetary remuneration. Umar puts up an advertisement for Company Z on his own website. The following options are available for Umar, please advise on their permissibility:

1. Pay-per-sale (also called cost-per-sale): In this arrangement, the merchant site pays an affiliate when the affiliate sends them a customer who purchases something from the merchant’s website (in this instance – kitchen appliances). Some merchant websites pay the affiliate a percentage of the sale and others pay a fixed amount per sale. Is this permissible?

2. Pay-per-click (cost-per-click): In these programs, the merchant site pays the affiliate based on the number of visitors who click on the link to come to the merchant’s site. Even if the visitors do not buy anything, the affiliate will still be paid for referring them to the merchant’s site. Is this permissible?

3. Two-tier programs: These affiliate programs have a structure similar to multilevel marketing organizations (also known as “network marketing”) such as Amway or Avon, which profit through commission sales and sales recruitment. In addition to receiving commissions based on sales, clicks or leads stemming from their own site, affiliates in these programs also receive a commission based on the activity of other affiliate sites which they refer to the merchant site. Is this permissible?

4. Questions 1 to 3 above are in the instance of a merchant selling only permissible items i.e. kitchen appliances. Other merchants, like Amazon.com for example, sell a wide range of products, like furniture, electronics, clothing, books, TV’s and movies etc. The difference with such merchants (those that sell both halaal and haraam products) is that irrespective of what the affiliate may have advertised (i.e. something halaal), if a customer is to purchase anything else on account of the affiliate’s link that got him/her onto the merchant’s site, the affiliate will still receive a commission on the sale of such non-affiliate advertised haraam products. For example, Umar advertises only plumbing equipment for Amazon.com with an affiliate link on his website. A person follows this link, purchases the plumbing equipment, but also continues browsing the website and also happens to purchase a haraam video game. Umar now earns a commission on this as well. Thus, his total payout is partly based on the commission from the haraam video game and the commission from the permissible plumbing equipment. Umar is supplied with a detailed breakdown (‘earnings report’) of this total commission from the merchant. He thus knows that, for example, of his $10 total commission earned, $7 is from the direct link to the plumbing equipment and $3 is from the unintended/indirect sale of the videogame commission. By advertising the plumbing equipment, and accordingly bringing the customer to the merchant’s website, Umar did not aid or support the purchase of haraam in anyway. It was solely the discretion of the customer in purchasing the haraam. Will the entire $10 be permissible for Umar?

5. If it is impermissible for Umar to accept the commission from the sale of the haraam item, should he give the commission earned from the haraam item in charity without the intention of reward? Can he continue to earn money through advertising while taking out the commission earned from haraam items and give it in charity?

6. Some merchants pay the affiliate a predetermined percentage based on the type of product sold. Is this, the predetermined percentage that varies per the fixed product categories permissible?

(In all instances, the actual advertisements of the affiliate will not have any animate objects, music, etc. or anything impermissible associated with it at all.)

Q: I dealt with one of the Islamic banks in purchasing a car. I purchased the car from the dealer and even paid a certain amount of the car upfront to him. Thereafter, I referred to an Islamic bank and asked them to assist me purchase the car. I even informed them that I already paid a certain amount for the car. The bank accepted to assist me and made me sign the form of acting as their agent of purchasing the car from the dealer. After the necessary paperwork was completed, the bank paid the dealer the remainder amount that I was owing and made me sign an agreement with them to buy the car from them. In exchange of the money they paid to the dealer, they sold the car to me with a profit. Is this contract which I entered into with the Islamic bank Shari’ah compliant?

Q: What is the ruling regarding selling a used item as a new item? There is a woman who sells only new clothing. However, she wore a certain dress for a few hours in a wedding and thereafter dry cleaned and sold the dress without telling the customer that the dress was used. Is this permissible? 

Q: Some salesmen don't accept small change when we make a purchase. Example, I purchased a water bottle for 11 AED and I had 10 AED with me. I gave it to him and said that I will give the 1 AED later. He said ok and the next time when I gave him he said, "Its ok leave it". He is not the owner of the shop. He told me that since its a large industry, 1 AED doesn't matter.

In the college library there is a rule that if a person failed to return a book within a certain time limit, he had to pay a fine of 1 Rupee per day till the book was returned. I returned the book 2 days late and told them that I am late. They told me not to repeat it next time. They did not take the 2 Rupees from me. It was a librarian and not the owner of the college or library who told me that.

Q:

1) We have customers who buy on credit. Is it permissible for us to tell them that we will give them a discount if they pay before the due date? For example, the customer purchases goods worth R100 000 on a three month credit basis. The customer is told, “If you pay within one month, you will receive a 10% discount”. Is this permissible?

2) I owe someone money through a cash sale, and there were no terms given for payment. If I ask the seller for a discount saying, "If I pay you tomorrow, will you give me a discount? From R10 000, will you make it R9 000?" and he accepts to give me a discount, will it be permissible?

Q: I am a businessman from Pakistan. I was looking into a new business opportunity which is in the kids entertainment industry. I was keen to know whether this sort of business is halal or not.

Basically we are looking into opening a kids play area which will have a softplay area and will have a few games like sports e.g. rock climbing or similar games. Mainly our focus will be kids of all ages but we are expecting teenage girls and boys as well. We won't be able to segregate the play areas.

Secondly, we might also have video games which include cartoon characters and some small rides for kids which are shaped as animals or cartoon characters. I am fully aware that music is haram so we are not planning to use any kind of music in the background.

Q: Is it permissible for a person to borrow goods from someone for the purpose of selling, and when he receives similar goods, he will replace the goods?

Q: My teacher ordered kitaabs for madrasah students. Some of us didn't hand over the payment yet. Is it permissible for us to take the kitaabs home? Will the bai' be faasid if we do so?

Q: I want to ask about buy and leaseback in Islam. Is it allowed?

There is this company selling shops in a mall with this buy and leaseback contracts where we own the shop but rights of giving it on rent resides with company and we get a fixed rent of 0.7% with 10% raise per year.

Also the company guarantees 20% price appreciation per year if we sell the shop back to them. All these are written in a single contract. Isnt this just the same as keeping money in banks with a fixed profit?

Q: I'm pretty sure you are aware of how dropshipping works, where someone buys from another person who actually buys from another wholesaler, etc.

So my question is that, would dropshipping be permissible if in the advertisement the following things are stated:

- Time and duration of delivery

- That the actual seller does not have possession of the item

- A thorough description of the item